Lt. Gen. Odd Bull, the chief United Nations observer of the cease fire arrangements between Israel and the warring Arab states, met here today with Gen. Moshe Dayan, Israel’s Defense Minister, on possible extension of the August 27 deadline for the banning by both Israel and Egypt of small-boat traffic on the Suez Canal.

Both Egypt and Israel agreed at the end of last month to such a ban for one month. U.N. circles here said that Gen. Bull asked for an extension of the deadline beyond next Sunday for another month. It is believed here that Israel will agree to such an extension, providing Egypt does likewise.